5 important reasons why people apply for credit cards

Cynthia Stewart
May 7, 2007
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Credit cards are an inevitable reality in modern financial world. Many factors prompt people to acquire credit cards . The five most popular reasons are listed in this article, not necessarily in that order.

1. No need to carry cash. The plastic does it all.

Imagine carrying a 10000 bucks in your pocket. The anxiety, insecurity and simply the bulk will keep on nagging you. People like to avoid this feeling and a credit card helps them achieve this.

2. Rewards, rewards and more rewards

Cashback, travel, airmiles, stay in hotel, special stores discounts, you name the rewardt and the credit card companies have it. Coupled with a great customer service program, this becomes a big factor luring people to take credit cards.

3. Convenient online shopping and purchase protection

Secure online transactions have created a boom in online spending. Credit cards are the most favored means to pay and buy things online. The 128 bit security offered by secured sites have made people believe that online transactions are the safest. Add to this the chargeback, and payment protection things even get better. Other people apply for a credit card for the reason that the products they purchase will have protection from the credit card company. This usually is the case when something has happened with the item you have paid through the credit card and the credit card company will pay for the loss by reimbursing the amount.

4. To help with money in emergency situations

Credit cards can be used to withdraw cash from ATM machines, which are available at numerous locations. Though, it is not advisable to withdraw cash using credit cards because there are heavy fees and transaction charges to pay but, people do so because the demands of the situation are too overwhelming.

5.Establish a credit history

They way you use credit cards and repay your balances are recorded by banks and reported to credit bureaus. This builds the credit history. People with good understanding of finances use their credit card wisely and build up a solid credit history. On the contrary those who use credit cards recklessly will somehow find themselves penalized in their credit reports.

There can be other reasons why people take credit cards, but the above mentioned factors are most favored by people to take credit cards